Many of the world's patent systems were developed decades or even centuries ago to promote the invention of stand-alone, physical goods. Companies invented and kept those solutions proprietary or even secret to prevent them from being used by others. So, patent laws and regulations were designed to protect these inventions, rewarding the inventor for his or her unique invention and ensuring his or her legal rights to it.

As the IT and other industries matured, companies signed cross-licensing agreements to secure freedom to develop new products. Patent portfolios have grown, and royalty income through patent portfolio management has become vital for enterprises.

From its founding IBM has believed in proprietary intellectual property rights and portfolios built through a rigorous and thoughtful patent process. We believe proprietary intellectual property helps bring distinction to new ideas and fosters healthy competition in the marketplace.

In today's globalized economy, products can be made anywhere, work can take place where the best skills are located and ideas can move instantly around the world via the network. Increasingly, competitive advantage lies in ideas.Globalization is forcing companies who want to stay at the head of the pack to innovate in how they do business at every level of the enterprise. Collaboration is now required to tackle some of the biggest problems - single companies simply cannot afford to solve them alone. 

Further, our customers in IT and other industries live in heterogeneous environments. They want interoperability and solutions that connect with their partners and customers. Open standards and open source solutions have emerged as key elements to meet their business needs and support these heterogeneous environments.

Accordingly, business leaders are moving along a continuum of innovation - stretching their IP strategies from the old proprietary model to the new more open and collaborative model.

While some of the world's legal and business institutions remain wedded to closed intellectual property or a proprietary model where all of their inventions are patented and royalties are charged, leaders are aggressively adopting a more open model. IBM's strategy is to achieve a "balance" between proprietary innovation and open, collaborative innovation.

So, what exactly is a "balanced" approach to innovation?

A balanced approach to innovation is protecting intellectual property rights, but not over-protecting or under-protecting such rights.

It is encouraging both proprietary innovation models and open innovation models.

A balanced approach to innovation is creating a fair and fertile environment for open standards and open source software.

It is preferring truly open standards over standards that are declared to be open but are actually proprietary or controlled by single entities.

A balanced approach to innovation is implementing laws and regulations that encourage global collaboration, including encouragement of universities and companies to work together in solving challenging problems.

Power.org, launched in December 2004 in Beijing, provides an excellent example of a collaborative innovation initiative where these more open IP policies are required. It is a community of companies and developers from around the world working collaboratively to develop specifications that enable expansion of the Power Architecture ecosystem.

Open IP policies have been key to enabling the collaborative innovation that Power.org and other similar communities enjoy today.

The truly open standard, Open Document Format (ODF), benefits from the open IP policies of its standard setting organization. ODF has the support of strong industry collaboration with many industry experts contributing to the evolution of the specification.

Moving to open document formats guarantees universal access to public documents and long-term retrieval of historical documents. As technology evolves, open formats ensure interoperability as well as future compatibility, thus preserving history for generations to come.

A hybrid IP model is important.Fifty years ago, IBM used proprietary hard disk drive or "HDD" formats.This technology evolved and changed to an open model - microdrives. IBM utilizes these open standards as part of our enterprise storage system. But we are also able to add unique value through new invention in the enterprise storage system. This hybrid approach gives customers higher performance solutions. The customers get the benefit of interoperability among a choice of basic disk drives - and IBM is still able to provide value added solutions. 

As these examples demonstrate, more and more intellectual property is being developed in collaborative engagements between customers, partners, universities and governments. The acceleration of collaboration between groups in different nations, as well as the increased interdependency of national economies, requires consideration of the worldwide intellectual property environment as well as each individual nation. No country is an island in today's global economy.

Since its accession to the WTO, China has made significant improvements to its laws and regulations governing intellectual property rights. China is making visible efforts to improve its intellectual property right legal system and enforcement system, and IBM applauds those efforts.

To be world-class in their acquisition and use of intellectual property rights, Chinese enterprises should consider establishing corporate patent policies. A patent policy gives focus and consistency to business practices involving patents.

In September, IBM announced its corporate patent policy, which applies everywhere IBM does business. It is built on IBM's long-standing practices of high quality patents and transparency of ownership. It is designed to foster integrity, a healthier environment for innovation, and mutual respect for intellectual property rights. Our patent policy states that:

Patent applicants are responsible for the quality and clarity of their patent applications.

Patent applications should be available for public examination.

Patent ownership should be transparent and easily discernible.

Pure business methods without technical merit should not be patentable.

In summary, the changing nature of innovation requires a holistic approach to managing intellectual property. The traditional view of intellectual property as a tool of exclusion is no longer enough.

(China Daily 05/14/2007 page9)